Thailand to overhaul air ticket price structure

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The Civil Aviation Authority of Thailand (CAAT) was yesterday ordered to undertake a major revamp of the structure of the costs currently used in calculating air ticket prices, to better reflect airlines’ actual costs.

Transport Minister Arkhom Termpittayapaisith spoke about the matter after a meeting of the civil aviation committee.

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The current structure has been in place since 2010, and so has the 13 baht per kilometre air fare ceiling, he said.

CAAT director Chula Sukmanop said if the single 13 baht/km ceiling is replaced by more than one rate, such as one for flights without basic in-flight services and another for full-service flights, ticket prices for low-cost airlines could be brought even lower than 13 baht/km.

However, the CAAT will still have to specify which services are categorised as standard in-flight ones and which are not, he said.

The CAAT will then be able to calculate the actual costs of the low-cost airlines and the air fare ceilings, he said.

“Separating the ceilings of air fares between the low-cost and full-service types will allow passengers to compare them and give them a clearer idea as to what they should expect from the ticket price they are paying for,” he said.

The air fare ceiling for low-cost airlines should be announced around the middle of this year, he said.

Mr Arkhom also ordered the CAAT to emphasise to airlines they are not allowed to shift their oil excise tax burdens on to customers by separating the fuel surcharge fee from the air fare.

The fee should be included in air fares as this is a cost that airlines should bear, he said.

He then immediately stated he was satisfied with airlines’ recent air fare hike of 150 baht per seat, which separates the fuel surcharge, and shifts the cost of the oil excise tax burden on to customers.

That was reasonable as the increase was in line with the average range of 150 to 204 baht that was calculated based on the latest rise in the oil excise tax, he said.

He did not explain the difference in the two statements.

Arkhom: Airlines must pay oil tax burden

Mr Chula said the civil aviation committee has also approved a number of training plans for maintaining civil aviation safety, security and facilities, which are designed for preparing Thai civil aviation for the next inspection by the International Civil Aviation Organisation (ICAO).

The universal security audit programme is expected to take place in July, he said.

The ICAO in June, 2015, issued a “red flag” which it said had indicated significant safety concerns. That has resulted in Thai-registered airlines being required to go through a re-inspection of their Air Operator Certificates (AOCs).

The re-issuing process of AOCs is expected to be wrapped up by June 30 this year and, after that, the ICAO will be asked to audit the country’s aviation safety standards, Mr Chula said on Monday.

Any airline which fails to meet the required standard will have its international flights suspended until they receive an AOC, Mr Chula said.

-The Bangkok Post

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